Jan. 31, 2010

The Bengals are not asking for an earlier option to get out of the lease and possibly leave the city. Under the heading of long-term assistance, the club is asking for the option to maintain lease terms spelled out for 2016. / Enquirer file

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The Bengals are offering to make short- and long-term financial concessions on their Paul Brown Stadium lease to help alleviate the predicted shortfall in the Hamilton County stadium fund, a move that could end years of bitter legal wrangling between the team and county.

In a letter written Oct. 16 by the Bengals to county Administrator Patrick Thompson, the club is offering to relieve the county of $2 million worth of capital repairs to the stadium, which opened in 2000.
According to the letter, acquired Sunday night by The Enquirer, the Bengals would pay to replace carpet inside the stadium’s club level area, convert to an electronic ticketing system and put in a new playing field. Those improvements are the county’s responsibility under current lease terms.

“Recognizing the history and current economic climate, we will try to play a role in an effort to help build an improved relationship between the two organizations (the club and the county) that can better serve our community,” Bengals vice president Troy A. Blackburn wrote to Thompson.

County Commission President David Pepper told The Enquirer that the county approached the Bengals and Reds and asked for their help in solving the stadium fund shortage, expected to be $13 million to $14 million in each of the next two years before escalating.

“It’s a dialogue that has been needed for a long time,” Pepper said.

Bengals public relations director Jack Brennan said Sunday night that “the letter speaks for itself. We have chosen not to comment on these dealings in public and will continue to choose not to.”

In the letter, Blackburn said the Bengals’ offer of assistance would “total roughly $40 million” over the life of the lease, which ends after the 2026 NFL season.

The Bengals are not asking for an earlier option to get out of the lease and possibly leave town. Under the heading of long-term assistance, the club is asking for the option to maintain lease terms spelled out for 2016.

As part of its $40 million, the Bengals would relieve the county of its obligation to make “out-year payments” of roughly $2.5 million to $2.7 million a year for the final nine years of the lease.

The best explanation of the Bengals’ desire to maintain the terms from 2016 is that they are neutral – the Bengals pay no rent, and the county makes no additional payment. This alone would add $30 million to the stadium fund, Blackburn says.

In the letter, Blackburn said the Bengals would like to change the tenor of the relationship between the club and the county, which has been cantankerous at times and included the county bringing antitrust claims against the Bengals.“These efforts,” Blackburn wrote, “have cost our organization millions of dollars in legal costs. … This community deserves a better rapport between our two organizations.”

The Hamilton County Prosecutor’s Office, as well as outside counsel, are evaluating the Bengals’ offer and are coming up with a response, Pepper said.“My overall view is that this is the first time we’ve had any dialogue that might help solve our stadium fund problem,” said Pepper. He said that if the Bengals had asked for an option to leave earlier than 2026, it would not be accepted.

The Bengals would like to get back the stadium suite that now belongs to the county and be able to re-sell it, which would possibly bring them in an additional $70,000 to $80,000 annually. The club wants to gain revenue from other events held in the stadium, primarily the Macy’s Music Festival, of which the Bengals are a sponsor.

The recession has hurt the stadium fund, which used revenue from a 1996 half-cent sales tax increase to build and maintain Paul Brown Stadium and Great American Ball Park.

A consultant’s report last year indicated that the fund would have a $4.7 million deficit this year and could balloon to $55 million by 2032. Collections averaged just a 1 percent increase between 2000 and 2008, and those were before the recession.